Iain Duncan Smith calls for review of Buy-to-let tax changes
The Conservative party's treatment of landlords has been blasted by former party leader Iain Duncan Smith, who called for Buy To Let (BTL) tax changes to be reviewed.
Writing in Conservative Home, Duncan Smith said the government should 'reconsider the way we treat private landlords who buy houses to rent'.
And he called on Prime Minister Theresa May to scrap the move to phase out tax relief on BTL mortgages.
He wrote: "We are now in danger of missing the point, for what is certain is that even if we do achieve our housebuilding target, there will still be a continuing growth in demand and a significant part of this will have to be available through private landlords.
"It is time to review Osborne’s tax changes on BTL landlords."
In 2015 the former Chancellor announced a raft of measures that he claimed would help first-time buyers, including a 3 per cent surcharge on stamp duty on BTL properties and second homes, the scrapping of landlords' wear and tear allowance and the phased reduction of tax relief on BTL mortgage interest, which began in April this year.
Duncan Smith wrote: "A large number of them are talking about no longer buying to let, and they blame it on George Osborne’s decision to impose a stamp duty levy on the purchase of homes to rent, to restrict mortgage interest relief to the basic rate of income tax, and to tax a landlord’s turnover rather than profits.
"This, they believe, has led to private landlords scaling back their operations or even leaving the sector altogether."
Alex Huntley, from Simple Landlords Insurance, added: "We know that tax is seriously concerning landlords - and having those concerns validated by such a prominent figure has got to be good news. The private rented sector pays an important part in the UKs housing market, and the combined impact of all the recent changes could have a significant impact in the coming months."
Ian Duncan Smith explained: "We should all be concerned about this, because private landlords are a significant provider of the additional housing we need. We won’t be able to provide all the housing in the medium term through aggressive building programmes alone. We will need other sources of accommodation, as well."
Duncan Smith also said the government should encourage landlords to invest more with devices such as 'VAT relief on conversions or even capital allowances'.
Activity in the BTL market has been severely affected by a series of tax changes, with transactions falling significantly in April 2016 after the stamp duty surcharge was applied.
The number of new buy-to-lets funded by mortgages has remained low.
Backing landlords, Duncan Smith wrote: "Despite what has been said and written, they’re not enormous property magnates, for the most part, but often people using the market to help provide retirement income in later life or assets to pass on to their children."
Last month, former Bank of England economist Professor David Miles warned that government had wrongly blamed landlords for the UK housing crisis and said politicians' attacks on landlords for spiralling house prices were 'profoundly wrongheaded'.